HOT|COOL MAGAZINE SPECIAL COLLECTION 2/2022

DBDH publishes Hot Cool, but the main business is helping cities or regions in their green transition. We will help you find specific answers for a sustainable district heating solution or integrate green technology into your region's existing district heating system – for free! Any city, or utility in the world, can call DBDH and find help with a green district heating solution suitable for their city. A similar system often operates in Denmark, the most advanced district heating country globally. DBDH then organizes visits to Danish reference utilities or expert delegations from Denmark to your city. For real or virtually in webinars or web meetings. DBDH is a non-profit organization - so guidance by DBDH is free of charge. Just call us. We'd love to help your district energize your city!

SPECIAL COLLECTION EDITION

No. 2 / 2022

INTERNATIONAL MAGAZINE ON DISTRICT HEATING AND COOLING

DISTRICT HEATING AND THE GROWING MARKETS

WANT Contents

BETTER

DISTRICT

HEATING

NETWORKS?

E FOCUS: DISTRICT HEATING AND THE GROWING MARKETS

COLUMN IT'S TIME TO CHANGE OUR NARRATIVE! By Anton Koller

By John Tang Jensen 5

DESIGN OF BASE LOAD HEAT SOURCES IN DISTRICT HEATING NETWORKS

SOURCE-TO-SINK EFFICIENCY OF DISTRICT HEATING AND HYDROGEN FOR BUILDING HEAT SUPPLY By Dr. Oddgeir Gudmundsson

Feedback from our 2019 Conference

25 26 32 38

8 10 14 19

ON THE BRINK OF THE BIG HYDROGEN BREAKTHROUGH By Jesper Frost Rasmussen

A 10 POINTS PLAN TO ACCELERATE THE EU HEAT TRANSITION By Aurélie Beauvais

Adriana: What made me laugh was to see how uncomfortable

the room was at the beginning of the session with the drag queens. We were all like 'oh, this is so weird...' And I was sitting next to people that I'm negoti- ating with or consultants that I work with and we were all like 'aaah....this is not what we do...". And as time went by, things just changed. People embraced it and were designing their dolls…

THE DISTRICT HEATING PLAN – AND WHY IT DIFFERS FROM WHAT YOU THINK. By Nis Bertelsen

MULTIPLE HEAT SOURCES PROTECT CONSUMERS FROM ENERGY POVERTY By John Tang Jensen and Morten Jordt Duedahl

MOTIVATION TARIFF – A KEY TOOL TO A LOW-TEMPERATURE DISTRICT HEATING NETWORK. By Tom Diget

DANISH POWER-TO-X ECOSYSTEM IS A WEAPON OF MASS REDUCTION By Lars Juncher Ankersen, Søren Schmidt Thomsen, and Jørgen Nielsen

Lina: ...there was dancing…

The data suggests diversity correlates with better financial performance. Likelihood of financial performance above national industri median, by diversity quartile, % Ethic diversity Top quartile Bottom quartile 58 MEMBER COMPANY PROFILE: COWI By Henrik Dalsgård and Maral Taghva

GETTING THE HYDROGEN ECONOMY RIGHT By Moten Helveg Petersen

Adriana: …dancing - that made me laugh a lot! We were just so awkward and out of our com- fort space as soon as we had to do something with glitter and glue and paper!

+35%

Gender diversity Top quartile Bottom quartile

+15%

Gender and ethic diversity combined Top quartile All other quartiles

+25%

Source: McKinsey Diversity Database

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Editor-in-Chief: Lars Gullev, VEKS

Total circulation: 5.000 copies in 74 countries 10 times per year

Grafisk layout Kåre Roager, kaare@68design.dk

Coordinating Editor: Linda Bertelsen, DBDH lb@dbdh.dk

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ISSN 0904 9681

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At EU level, the heat pump industry has just started a campaign calling for a “heat pump accelerator”, the hydrogen industry already has one, and now Euroheat and Power has also published its 10-point paper about district energy.

By Anton Koller, Divisional President District Energy & Buildings and Leanheat Software Suite, Danfoss Climate Solutions

Will district energy get the same kind of attention as heat pumps and hydrogen? As a matter of fact, we have an amaz- ing story to tell – a story that holds the key to quite a few of the energy and climate problems that Europe is struggling with right now. But district energy is still perceived by many as a way of locking in fossil fuels as the heat fed into the grid is often a “byproduct” of coal powerplants and the likes, leaving a bad aftertaste. High time to change the narrative … and, wherever possible, the type of heat we use! Let’s have a quick look at the numbers in Europe. Heating and cooling represent half of the total final energy consump- tion. Roughly 80% is still based on fossil fuels, most of them im- ported. And unsurprisingly, most of Europe’s greenhouse gas emissions are related to energy production and consumption. Meaning that we must address heating and cooling as a top priority. How? Significantly stepping up the share of renewa- ble energies is indispensable. The International Energy Agency (IEA), for example, found that at global level, the share of re- newables both in electricity and in final use needs to at least double until 2030 compared to 2019. Who says more renew- ables, says higher need for operational flexibility and thermal storage. Can we help with district energy? You bet. Coming back on the heat we use. Does it have to be the excess heat of coal powerplants? Absolutely not. Rather, we have the luxury to be able to use many different heat sources. Let’s take the example of cooling. There are many facilities that heavi- ly rely on cooling, therefore systematically generating excess heat from the cooling process. I am thinking of datacenters, supermarkets, hospitals to only name a few. Today, this heat is in most of the cases “wasted”. But it does not have to be like that. We should use it, either on site, directly, or by feeding it into a district energy network – thereby reducing the need to generate heat. This is not only energy efficient, but even more so resource efficient! Given that the cooling process is in most

cases electrically powered, and that electricity will be increas- ingly based on renewables, that way we will use these resourc- es much more efficiently. Adding a heat pump dots the I’s and crosses the T’s – allowing to achieve the required temperatures in a highly energy efficient way. And with artificial intelligence we can further optimize the process. Will this make a differ- ence to address the energy crisis? No doubt. So what? I guess, we should not waste our time by enviously glancing at other technologies such as heat pumps and the political attention they are now receiving. And rightly so. The challenge to decarbonize heating is massive and heat pumps are an essential part of the puzzle to solve the energy and cli- mate crisis. What we should do, though, is to reposition district energy in a much more modern and proactive way. It’s not this thing from the past, powered by dirty fossil fuels. Rather, it is the solution to transition to renewable energies and use our resources much more efficiently. We also need to get much better in working with local decision makers. It’s one (impor- tant) thing to get the overarching framework right in Brussels, but it’s at least as important to make the local decision makers such as for example our mayors aware of the benefits that dis- trict energy provides to citizens. Take the example of Sonderborg - city on Als in the southern part of Denmark - which has committed to decarbonize its energy system by 2029. Local decision makers set up “project zero”, bringing on board all relevant stakeholders in town. A plan was made back in 2007, mapping among others heat sources and heat demand. Meanwhile GHG emissions have already been more than halved. Today, we have a fully inte- grated energy system in Sonderborg which is based on three pillars: energy efficiency, renewable energies and recovery and reuse of excess heat – with district energy being a central part of the solution. Now, if that’s not highly attractive, I wonder what else is?

Design of base load heat sources in District Heating networks

This article explores how heat sources should be designed for the next generation of district heating networks and how this will benefit consumers and society. Originally district heating heat source design When buildings in an urban zone are designated to be sup- plied from district heating networks, the heat sources com- monly are chosen and designed to cover demand and deliver security of supply. It is also designated to deliver low or zero car- bon emissions and ensure affordable heat prices by combining heat sources and technologies suitable for different purposes. Heat sources for district heating were originally mainly based on the waste heat from power production in CHP plants, heat from waste incineration, and in some cases, waste heat from industrial production plants. In most cases, the heat sources existed, and the possible heat delivery was higher than the demand in the district heating network being built for using these waste heat sources. Figure 1 shows the combination of waste heat and the needed reserve capacity that district heat- ing networks need to cover the waste CHP supply when this unit is stopped for maintenance or if it falls out. By expanding district heating networks, building transmission lines, and intelligent design of heat sources in combination with heat storages fitting to heat demand profiles, it is possible to use waste heat sources 100%. This way, you can avoid losses, get peak load heat demand covered by non- fossil solutions, keep affordable heat prices, and deliver a supply of security to heat consumers, all at the same time.

By John Tang Jensen, BEIS

The baseload waste heat source can supply all heat in the dis- trict heating system, and reserve capacity is only built to ensure

Heat sources

Capacity MW

200 %

Peak and reserve load

100 %

Around 5 - 15 % of production

Reserve load

0 - 2 % of production

98 - 100 % of production

Around 85 - 95 % of production

100 %

50 %

Base load capacity

Heat demand

50 %

Heat demand

Annual days

365

Figure 1: Duration curve heat demand – ranked from coldest day

Figure 2 Increased delivery and decreased heat loss

the lost heat in figure 1 can be delivered to consumers without additional investment in production capacity. Figure 2 shows an example of a design where the supply loss is reduced by expanding heat networks. The base load capacity, in this case, delivers between 50% and 80% of capacity (MW) but up to 95% of the total heat demand (MWh). The share can vary greatly from plant to plant and de- pends on local conditions and available heat sources. Com- pared to the previous example shown in figure 1, the potential heat loss shown in the blue shaded area is reduced by 40% to 70%, depending on the heat demand profile. This design is very common today. The heat loss is often re- duced further if the heat source is a fossil fuel-based CHP plant, not necessarily needing to produce when the electricity price is low and heat demand also is low in the summertime. It often can be beneficial to add a heat storage system making it possi- ble to produce the heat according to electricity prices making electricity production independent of heat demand simulta- neously. The storage also decreases the need for reserve and peak load heat capacity. It reduces the fuels used for reserve and peak load, which can be important due to low carbon re- quirements, and to avoid using expensive fuels like oil and gas for peak load purposes. The blue shaded loss in figure 2 will be more difficult to re- move if the waste heat source is constantly producing – from waste incineration plants or from industries. Design future heat source supply system The constant running baseload heat capacity needs to be re- duced or constructed to around 45% to 55% of the total peak- load heat capacity demand to reduce the blue-shaded loss shown in figure 2 to a very low level. Suppose tap water heat- ing uses 25% of production year-round and heat loss in the network, for example, is 20%. In that case, the lowest capacity

the security of supply. The area below the red line and blue shaded area shows the actual delivery of heat covering 98 – 100% of heat demand in the district heating network. The blue shaded area shows how much more heat the waste heat source could deliver by the installed capacity if delivering is constant at full capacity. The shaded area can easily be up to half the possible heat delivery. If a heat supplier needs to pro- duce power, incinerate waste, or produce industrial goods, the waste heat in the blue-shaded area will be lost, which is not an issue if the price for power, waste, or goods covers costs. The only problem may be the lost energy, which could have been used to reduce carbon emissions and save resources elsewhere in the energy system. Suppose the power plant, the waste incineration plant, or the industrial plant, due to competition, are getting dependent on the income from heat. In that case, the symbiosis between dis- trict heat networks and waste heat suppliers may not work the same way anymore. The heat supplier may need to stop pro- duction when heat demand is not present, for example, in the summertime. This can be an issue for CHP plants and waste incineration plants, losing the ability to compete on electricity or municipal waste prices if heat cannot be sold. The district heating network company then may not have a reliable and constant baseload supply anymore. This issue can be solved, and the solutions are discussed in the next sections. Adjusted original heat source design In most urban areas, district heating networks are not covering all buildings, and some areas may be industrial, using natural gas, which could be replaced by district heating. There may be block-centrals or nearby district heating networks based on boilers or other more expensive heat sources. Heat sales will increase if the district heating network can expand the cov- ered area by connecting more consumers and/or establishing a transmission line to neighbouring networks. Then a part of

Heat sources

technologies can ensure low heat prices because the technol- ogy getting more expensive by increasing prices can be turned down and other technologies turned up Design of new district heating networks Two main approaches can be considered when designing new networks and heat sources for new networks. If a large existing waste heat source is already available, it would be convenient to start delivery from this source the same way as the original heat source design. Focus should then be on ex- panding the heat network until the heat source design needs to be adjusted and supplemented with middle load sources. In the network expanding phase, the chosen reserve load tech- nologies should be suitable for middle load and, in the begin- ning, maybe only used for peak and reserve load purposes. In the end, the heat network demand may reach a level having a heat source design like the future design shown in figure 3. If no large existing waste heat source is available from the be- ginning, another approach may be better and recommend- able. Often it takes time to get consumers connected in new networks, and it can then be recommended to start up with the middle load technologies, also providing base load ca- pacity when the heat network is being built. This gives time to find a better high-grade waste base load technology that can take over with full capacity from finished construction a little later. This will make base load suppliers get the expected sales and revenue from the beginning. If no waste heat sources are available for base load in the new network area, this way of designing heat sources gives time to attract, for example, a new waste incineration plant to an area or to attract data cen- tres, hydrogen production plants, Power-to-X, all wanting to run constantly and deliver full load heat capacity. Especially for waste incineration plants and large, continually running waste heat suppliers, high heat delivery is essential and can trigger incentives for establishing solutions for delivering waste heat. The feasibility simply gets better when supply can be expect- ed full-time, and no heat is wasted like the blue shaded areas shown in figures 1 and 2. The middle load technologies, which were delivering all heat from the start, will now be able to deliver heat in the winter- time, deliver flexibility to the electricity system if based on elec- tricity and/or CHP, and ensure low heat prices. This is because the production can be changed according to electricity and fuel prices. If a heating system is constructed the right way, in- cluding heat storage, it will work the same as a battery, which can be very valuable for society and the electricity system sav- ing capacity and balancing costs.

Capacity MW

Peak load/ Reserve capacity

Around 2 - 5 % of production

100 %

Around 50 - 85 % of production Around 10 - 45 % of production

(Middle load capacity)

50 %

Base load capacity

Annual days

365

Figure 3 Base load heat source design according to capacity demand

demand in the summertime will be around 45% of the total demand, which should be the lowest designing point for base load heat sources. Often it can be beneficial to design the base load capacity a little higher, significantly if a storage system can absorb some of the extra waste heat. Figure 3 shows a situation where the base load covers 55% of peak load heat demand. When the base load capacity is 55% (MW), the share of heat delivered heat would be around 70% of demand (MWh). Po- tential heat loss if the base load source needs to run constantly is reduced to a very low level. The original heat source design will not be able to deliver all heat demand in the wintertime if the target is to use peak load source as little as possible. The heat source design then needs a low carbon “middle load” source to deliver heat in the wintertime. This can be a heat pump using air, other ambient sources, or low-grade heat waste heat from infrastructure sources - municipal wastewater treatment, water systems, Transformers, underground trains, gas compressors, mines, etc. - or allowed biofuels. The choice of middle load technology should complement the base load technology or at least not be dependent on the same fuel. If baseload technology is CHP-dependent on high electricity prices, it would be a good choice to choose a middle-load tech- nology dependent on low electricity prices, like heat pumps using ambient or low-grade waste infrastructure heat sources. The capacity of these middle-load technologies can be higher than the expected 40%, as shown in figure 3 if higher, the mid- dle load capacity can deliver peak low capacity and addition- ally be able to deliver reserve load capacity for the base load unit. This way, it can reduce fossil peak load capacity to zero. It additionally can be recommended to design these middle load source technologies in combination, maybe both having a heat source using a heat pump, a waste heat source, and/or a biomass boiler. If the power system needs power capacity, even CHP solutions could be considered. The combination of

For further information please contact: John Tang Jensen, JohnTang.Jensen@beis.gov.uk

A 10 POINTS PLAN TO ACCELERATE THE EU HEAT TRANSITION Today’s energy security crisis is a heating crisis. This is a message that bears repeating. The challenges we face are unprecedented: heating and cooling account for 50% of EU energy demand, with natural gas supplying a stunning 42% of the heating and cooling demand. Luckily, most of Europe’s gas is used for low-temperature heating in buildings, which can be replaced with exist- ing technologies. But are we up to the job?

By Aurélie Beauvais, Managing Director, Euroheat & Power

ensure that we support not only solutions that are “good on paper” but solutions that will work for everyone, every region, and wallet. The challenge is immense but not impossible. There are solu- tions available that can be immediately deployed to phase- out fossil fuels in heating. These solutions are locally owned, climate-friendly, ready to deploy, and affordable. We can har- vest local renewable and sustainable waste heat sources by deploying and expanding efficient heating networks. We can also deploy clean heating technologies such as heat pumps. In short, we can deliver concrete results to save natural gas, shield European consumers from soaring energy prices and strengthen the resilience of our energy system. Still, the first six months since the presentation of the REPower EU have passed, and too little has been done to make this happen. On the 18th of October, ten organisations united under the leadership of Euroheat & Power proposed a 10-point plan to accelerate the EU heat transition. The plan covers a range of measures, some of which may be integrated into the next batch of EU emergency measures. These include mandatory heat planning for local authorities, the EU-wide phase-out of individual boilers that use only fossil fuels, or even dedicated incentives to recover sustainable waste-heat sources which remain untapped in several urban areas. The 10-point plan also underlines the necessity for a new EU heating and cooling strategy with concrete regulatory and fi- nancial instruments to unlock the full potential of renewable and sustainable waste-heat solutions in heating networks. This crisis has become the perfect “energy storm” to acceler- ate the uptake of smart and sustainable district heating and cooling technologies in Europe. Now is the time to upgrade our emergency toolbox with concrete measures to spark a long-overdue clean heating revolution, bringing Europe on the path to climate neutrality and energy independence.

In the Brussels corridors, there is a rumour that “renewable energy is freedom energy.” It couldn’t be more accurate, as renewable electricity sources such as wind and solar are growing exponentially and provide a solid boost to decarbon- ise heating, notably through residential and large-scale heat pumps. Recent EU energy and climate initiatives (such as the ‘Fitfor55’ package and REPower EU) mainly focused on supporting the deployment of renewable electricity sources and their mol- ecule-based twin, renewable hydrogen. However, it is only a part of the solution: in 2019, electricity represented only 6% of household energy consumption for heating. So what about the remaining 94%? 1 Before the crisis, we had the luxury of time to wonder what would be the cleanest and most efficient heating sourc- es to decarbonise fully by 2050. However, the situation has changed drastically, and while the demand for clean heating technologies has never been higher, we must now satisfy four additional imperatives. First, we need solutions that can achieve a quick and sizea- ble reduction in natural gas demand for heating, either by increasing efficiency or replacing fossil fuels-based heating. Second, these solutions must be mature, reality-proofed, and available for fast-rolling over the next 3 to 5 years. Third, the clean heating solutions we’re looking at should address the short-term imperative to break free from natural gas depend- ency and be aligned with Europe’s long-term pathways to- ward climate neutrality. Last, the solutions that will comple- ment our “energy crisis exit toolbox” must be fair and leave no one behind. We must insist on this last bit: this crisis is a social bomb in the making. Energy bills are soaring, and EU SMEs and companies are putting their activities on hold across Europe. The EU uni- ty is already being torn apart by the current economic crisis and rising social discontent. For the future of Europe, we must

Download the 10-points plan

sustainable choice for years to come

District heating has been recently assigned a major role in ongoing energy transformation and transition

This is a key parameter to ensure quality and long lifetime of the installation. Finally, the thermal performance of the pre-insulated pipes must be evaluated diligently and must be thoroughly considered. Using our Total Cost of Ownership tool to decide about the type of preinsulated pipe system within LOGSTOR system solutions, we can document that using readily best available technologies (TwinPipe systems) will lead to reduction in heat losses of more than 60% compared to next best alternatives (single pipe systems).

sustainable energy. As a global leader in district heating pre-insulated pipes, we feel obliged to state our position on current district heating opportunities says Andrzej Krämer, CCO Kingspan LOGSTOR. First, we must realise that the duration of time of dug up streets and the re-dig up due to repair must be minimised at all costs. Secondly, and equally important, the installation should be

www.logstor.com

THE DISTRICT HEATING PLAN – and why it differs from what you think. The need to change how we heat our homes has been put into overdrive with the in- vasion of Ukraine and the following energy and natural gas crisis. This urgent need to get rid of the expensive fossil fuels only adds to the long list of other reasons: climate change, energy poverty, and air pollution. But how should the energy planner in charge of the switch from individual boilers to collective district heating systems approach this enormous task? The most used approach is to make a plan. The plan is a document that outlines different technical, economic, and environmental benefits and consequences. In this article, I try to sketch out the role of this district heating plan and why it might be different than commonly understood.

By Nis Bertelsen, energy analyst, PhD

Out with gas and prepare for a low-carbon heat system There is a pressing need to change how we heat our homes around Europe and the world. A new urgency has arrived with the Russian invasion of Ukraine and the subsequent energy price crisis. Natural gas, oil, coal, wood pellets, and most other combustible fuels are now expensive and scarce resources. The price of natural gas, the single most used fuel for heat supply, is now at a point that threatens to bankrupt families or forces them to freeze during winter. This should be seen in combination with the challeng- es the energy and heating sector has been struggling with for years. Climate change is probably the single largest threat to our society, but it is also a long-term and a not so tangible challenge to face. Air pollution is a significant threat to the health and well-being in some countries. The biodiversity crisis puts new per- spectives on the sustainability of using biomass for heat supply. Energy poverty has long been a subject in some countries, while in others, for example, Den- mark, it is a new challenge that a portion of the popu- lation struggle with paying their energy bills. There are many reasons to switch from old dirty boil- ers to clean heating. In dense urban areas, district heating has the potential to solve many of the chal- lenges mentioned above. By switching from individu- al heat supply in single buildings to collective heating, it becomes possible to exploit hard-to-reach but read- ily available heat resources: excess heat from industry, data centers or power plans, geothermal resources, large-scale heat pumps, or large-scale solar thermal. I am sure this is known to many of the readers of this magazine – so how to actually implement these large- scale infrastructures? Heat supply is intertwined with many other agendas I can name many good reasons why district heating could be an option for heat supply in the future. But

“the many actors out there” have to make the deci- sions: municipalities, citizens, energy companies, util- ities, industries with excess heat, etc. One question they all will ask is ”what’s in it for me?”. The answer can be many different things: cheap heat and clean air for the citizens, clean heat supply in the municipality, extra income for an excess heat supplier, jobs, and investments in the area. These reasons are multiple, context-dependent, and always up for ne- gotiation. Just look at how fast the discourse around fossil fuels, especially natural gas, has changed from last year to today: last year, the need for getting rid of fossil fuels was based on climate change, and today it is a question of security of supply. Suddenly heat sup- ply is a matter of national security, followed by new challenges and opportunities. Therefore, there is not just one good reason to build district heating systems: it depends on the many local conditions and actors. And the planner who wishes to implement district heating must consider and depart from these specific conditions. But the planner must also make the different ends meet because district heating is one single infrastructure, and there needs to be agreement about the use, investment, and ben- efits of district heating among the many users and producers. The district heating plan can create a shared understanding of a complicated topic How can these many different actors then agree on investing in a single large and collective system? The usual response by engineers and energy planners is to make a plan. A plan that forecasts future develop- ments, how the district heating system would op- erate under certain conditions, compares it to oth- er types of supply and highlights different benefits. These benefits will usually include the various rea- sons why a district heating system should be built: If the climate is a major driver, then CO2 emissions could be a good indicator. If energy poverty is in fo-

instead, it is a vehicle to promote discussions around a framed topic. This can create engagement, focus, and trust. The plan will not magically materialize its conclusions in the real world, but it can develop common understandings and creative dia- logue.

cus, then heat prices and savings might be more important.

The plan allows the different actors to discuss and try to see themselves in this potential future and to argue about what they like and do not like. In this perspective, a plan is not “a traditional cookbook recipe for “how to make district heating”;

CONCLUSION

How to make a plan? And now to the 1000€ question: how to make a success- ful plan for district heating supply? In my research, I found three elements that are part of a good plan for district heating supply. The first two elements are recommenda- tions for the municipalities, utility companies, and local actors who deal with the specific implementation. The last recommendation is for state-level actors responsible for the regulatory framework that shapes heat planning activities. First, a plan depends upon the local context. It depends upon all the different local conditions that must be considered. Plans should highlight these considera- tions, show how different actors can be part of the plan, and highlight the specific elements that drive the pro- ject. They do not need to be specifically district heating plans, but district heating can be one potential supply among other types, such as individual heat pumps. This way, each municipality and local government will look into and explore which different options exist and which options make sense for their specific conditions. Second, the plan is a tool for dialogue. Use the plan to determine which actors can see themselves in the po- tential new heat supply and which cannot. Most will need to make compromises, and perhaps some – fos- sil fuel interests – will need to be excluded. The results

will be different from the first draft plan, but if there is agreement about the purpose, conditions, and targets, then most likely, the result will still be within a reasona- ble target. Third, transparency and agreement about the funda- mental parts of a plan are necessary. There must be agreement about calculation methods and assump- tions, price forecasts, and technology development. If no agreement has been reached, there is a risk that the whole process will discuss assumptions and not results. In Denmark, we have public authorities who publish technology price catalogs and energy price forecasts. They might not always be correct, but at least there is a common reference point. Last, it is essential to remember that the results of working with a plan are emergent from the process and not given beforehand. As Mick Jagger of the Rolling Stones famous- ly sang: “You can’t always get what you want - But if you try sometimes, well, you might find - You get what you need.” My advice is, therefore, to get out there and start planning and involving stakeholders. And do not be too afraid to make mistakes because they will come. But with the current challenges facing heat supply around Europe, we need to try to change how we provide heat for our homes..

Nis Bertelsen

Who will benefit from reading this article? Professionals working with new or expanding district heating systems. Whether they work on a state level making the right framework conditions or on the ground with implementation, this article provides a new look at the technical and economic plans and how they can bring different actors together. What will your findings do for DH? We urgently need to change our heat supply systems, and district heating is part of the solution. This article provides a new perspective on the district heating plan's purpose and how to think about the implementation process. The article is about the many different actors and their reasons who have to come together to invest in and build district heating systems. These many actors with different starting points have to work together and agree on how the district heating system should be built. Often a technical and economic plan is made, and this article discusses the role of this plan.

For further information please contact: Nis Bertelsen, nis.bertelsen@klimaraadet.dk

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MOTIVATION TARIFF – A KEY TOOL TO A LOW-TEMPERATURE DISTRICT HEATING NETWORK

By Tom Diget, Chief Operating Officer, Viborg District Heating Company

Viborg District Heating Company constantly works to improve the efficiency of the net- work. Lowering the temperature is essential, but the company needs the customers to cooperate – i.e., by lowering their return temperature. As an important tool for this goal, the district heating (DH) company has developed a motivation tariff, which gives some customers a discount, whereas others will have to pay more. The direct economic out- come of the tariff is a loss of approximately 270,000 EUR per year (income minus cost), but the efficiency gain in the whole network adds up to more than 679,000 EUR per year. This means a net benefit of around 400,000 EUR annually - a surplus converted into lower general heat costs.

Motivate the customer to lower the return temperature A DH company has many good reasons to lower the temper- ature in its network. Lower temperature gives a lot of different possibilities compared to a network with high temperatures. Not least, a lower temperature will help stay economically competitive against other heating technologies. The DH company controls the supply temperature and can re- duce it in times of lower heat consumption. But when the sup- ply temperature has reached a certain level, the return temper- ature limits how much further it is possible to lower the supply temperature. In Viborg, as in many other cities, the domestic hot water demand sets the minimum supply temperature in the DH network most of the year. In existing systems with old- er, more inefficient housing stock, there are limits to how low a supply temperature can be reached, typically around 60 de- grees, which is higher than the required temperature for heat- ing – most of the year. The consumer controls the return temperature. Therefore, the DH company has a clear interest in helping consumers low- er the return temperature. However, to a consumer, “low re- turn temperature” is, at best, of very little interest. Consumers want comfort, i.e., warm homes in the most simple, secure, and

cost-efficient way. Of course, the cost of heating must be low enough to be competitive against other options – but no one is interested in the return temperature. Thus, the consumer will act disloyally if another opportunity calls. So, to be able to low- er the temperature substantially, the DH company must find a way to motivate the consumers to lower the return tempera- ture even more. The benefits to the end costumers To motivate the consumers, they must understand what the benefits to them as consumers are. The list of benefits to the DH company includes lower heat loss, longer lifetime of pipes, more benefits from flue gas condensation, higher COP at heat pumps, and many more. But to most consumers, the real mo- tivation will always be saving money through lower heat costs. Some will be interested in other aspects (general benefits to society, climate change), and they should not be forgotten, but for most, the real motivation will be to save money.

Setting the goals for supply and return Supply temperature

The short-term goal for the supply temperature simply is a temperature high enough to supply a well-operated network. The long-term strategic goal should be to aim at the lowest

Temperature level comfort heating compared to domestic hot water Heatcurve 90 °C Heatcurve 80 °C Heatcurve 70 °C Heatcurve 60 °C

100

Outside temperature Domestic hot water

-10

-20

Hours

at 65°C) will set the temperature demand for most of the year. Even with the 90°C-degree heat curve, only around 900 hours a year will require a supply temperature above 65 to provide comfort heating. The return temperature must be lowered In essence, the DH company in Viborg must deliver a supply temperature of 65°C for around 8,000 hours every year. Hence, finding ways to motivate consumers to lower the return tem- perature is interesting. The return temperature is set by the temperature level of the two heat demands. It is recommend- ed to have comfort heating in houses at around 21°C. The the- oretical return temperature is, therefore, close to this temper- ature. Typically, approximately five degrees higher is possible. So, a goal of 25°C from the comfort heating is not impossible to reach. Domestic hot water needs a circulation temperature of 50°C, so the return temperature from this is usually higher than from comfort heating. If there is no circulation, the do- mestic hot water can have a return temperature at the same temperature as comfort heating since the temperature on the cold side is the domestic cold water.

temperature possible with the best available technology, and then even a bit lower, as technology evolves and will allow for even lower supply temperature in the future. In Denmark, the DH companies supply heat to cover primarily heat for two different demands: Domestic hot water and the comfort heating of the building. During a year, one of the two heat demands sets the required supply temperature. The com- fort heating sets the temperature needed during the winter when the outside temperature is coldest. When the temper- ature outside rises above a certain level (around zero degrees Celsius), the domestic hot water demand starts to influence the required temperature level to deliver safe domestic hot water. The figure below shows the normal supply temperature at the consumer over a year in different building types. The dif- ferent heat curves show the supply temperature for comfort heating in different buildings, where the heating system has been dimensioned to different supply temperatures – mainly based on the energy efficiency of the building and the radiator system. Sometimes it is possible to divide the heat network into separate sections. In this case, it is possible to take advan- tage of the different demands for supply temperature in the design of the various heat network zones. As shown in the fig- ure, the demand for domestic hot water (supply temperature

The goal is to save money for the customers To motivate the consumers, there must be a goal for them in-

If the consumer has a heating installation that delivers a return temperature above the calculated temperature plus 3 degrees (from 2024 0 degrees), they will have to pay extra. The extra cost is 1 % per degree above the threshold. The additional cost can often finance needed improvements in the heating system, potentially providing better comfort in their home. This extra fee has effectively motivated building owners to upgrade their heating systems. The reduction is the top area with the most considerable effect on the overall system. Customer interaction is key Viborg DH Company intends NOT to make their customers pay more. The intention is to develop the heating system, thereby lowering the cost for all customers. Therefore, Viborg DH Com- pany actively approaches customers with the worst delta-T (the highest return temperature) and advises them on mod- ernizing and upgrading their system. The result is that the customers save money, and at the same time, the DH company saves money, which can be trans- formed into lower prices for all customers. The customers who pay more due to the motivation model are not just left hang- ing there, paying more year after year. They are offered help to lower their heating bill by the DH company, which approaches the customers to provide assistance and guidance. The two pictures illustrate the supply- and return temperatures set for all the customers of the DH company. In 2002, many customers needed a very high supply temperature and only

dividually. In Denmark, there are different models of how to do that. The motivation tariff used in Viborg is a model where the supply temperature as a yearly average is used to calculate the goal for the return temperature. The average supply and return temperature can be collected from, e.g., Kamstrup energy me- ters as used in Viborg. Viborg DH Company also works closely with their customers to help them save money, improve com- fort, and thereby add to the substantial saving for the district heating company. They rent out the heat interface unit, so it’s easy moneywise to have an updated one, but that’s another story. Motivation model – effect on the customer The motivation model used in Viborg is straightforward. If you cool the water well, the DH company offers a bonus. If your installation is old and inefficient, you will have to pay extra – a strong incentive to improve your system. Let’s look at three examples. 20,0 25,0 30,0 35,0 40,0 45,0 50,0 55,0 60,0 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 Supply temperature [°C] Motivation tarif Viborg 2022 Returntemperature Returntemperature benefit 1 % per °C Returntemperature cost 1 % per °C X X ex1 ex2 X ex3 Suppose the return temperature from a consumer is at the cal- culated level or up to 3° higher (this zone will be smaller the next year and disappear in 2024). In that case, the consumer pays the standard price for DH - a typical consumer with an average heat installation functioning normally. The customer is within the neutral zone, merely paying the normal price. Money will be saved if the consumer can deliver a lower return temperature. If the annual average return temperature is be- low the calculated return temperature, the consumer will get a 1 % discount per degree below the calculated return. This is an essential saving for some homeowners compared to their overall energy bill. The saving can finance improvements in the heating system and potentially provide better comfort in their home. Tip! The saving area has been divided into two different parts, where the highest reduction is when the supply temperature is below the promised flow temperature by the DH compa- ny. This is done to remove the customers’ focus from whether the supply temperature is consistently above what has been promised and to whether they can heat their homes appropri- ately and simply be a happy customer, as they save even more.

40 45 50 55 60 65 70 75 80 85 Supply temperature °C in 2002

40 45 50 55 60 65 70 75 80 85 Supply temperature °C in 2019

managed to lower the temperature a bit. Whereas the picture from 2019 shows that very few customers need a very high supply temperature and that many have managed to de- crease the return temperature. In short, the motivation tariff has helped a lot. From this picture, it is also obvious who will be approached by the DH company to help lower the return even more – the ones with the highest return temperature and those in need of very high flow temperatures. Results for the DH Company In Viborg DH Company, this has been a constant focus area since 1995. The motivation tariff has benefited the customers and the company – but there is still some way to go. So, the motivation tariff is here to stay for a long time. The motivation tariff was introduced in 2002, and the temper- ature has since then gradually dropped. In 2002, the yearly av- erage supply temperature was 80°C, and in 2019 it was 65°C. In 2002, the annual average return temperature was 50°C; in

2019, it was 40°C. This is illustrated above. It has been calcu- lated that the average supply temperature can be lowered by another 1-3°C over the coming years and still cover the com- fort needs of all consumers. But at the same time, the return temperature must also go down. The overall economy for the DH company is very positive. The motivation tariff costs the company more in reductions than what is paid extra from the customers who must pay more based on the motivation tar- iff. Looking at this way, the motivation model costs the DH company around 270,000 Euros per year. But that is not the entire picture and not the correct way to look at the model. The reduced heat loss, due to the possibility of delivering at a lower temperature, more than compensates for the loss in the simple economy. The reduction in heat loss saves Viborg DH Company around 670,000 Euros per year. The overall ef- fect of introducing the motivation tariff is savings of around 400,000 Euros per year, which will lead to reduced prices for all customers in the Viborg DH company. The reduction is as much as 10 % of the cost of heat losses in the network.

Supply temperature Viborg

2002 2007 2019

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Return temperature Viborg

2002 2007 2019

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Significance of temperatures in future district heating Today, as can be read, the temperature means a lot, but in the future, the temperature will mean even more due to the shift to new forms of production. The IEA DHC's guidebook 2021, "LOW-TEMPERATURE DISTRICT HEATING IMPLEMENTATION GUIDEBOOK," explains how the distribution temperatures (Sup- ply and return) provide savings in production efficiencies of up

to 6 times more than today's combustion production plant. The future production sources are geothermal, heat pumps, surplus heat, and solar heat. You will save significantly if the tempera- ture is lowered before you invest in the new technologies.

For further information please contact: Tom Diget, td@viborg-fjernvarme.dk

EFFECT OF MOTIVATION TARIFF – EXAMPLES Below are a few examples of the effect of the motivation tariff on three different customers. The examples are based on a 130 m² standard house, using 18.1 MWh/year of heat.

20,0 25,0 30,0 35,0 40,0 45,0 50,0 55,0 60,0 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 Supply temperature [°C] Motivation tarif Viborg 2022 Returntemperature Returntemperature benefit 1 % per °C Returntemperature cost 1 % per °C X X ex1 ex2 X ex3

Only 10°C cooling Supply 60 °C and return 50 °C. Calculated return 39 °C, but with the 3 °C neutral band Heat price (18.1*50) 905 € Fixed cost (130*2,6) 338 € Motivation (50-(39+3)= 8 °C = 8 % -> 18.1*50 €*8% = 45 € Total bill 1315 €

25°C cooling Supply 60 °C - Return 35 °C. Calculated return 39 °C Heat price (18.1*50)

905 € 338 €

Fixed cost (130*2.6)

Motivation (35-(39)= -4 °C = -4 % -> 18.1*50 €*-4% =

-36 €

Total bill

1207 €

23°C cooling, but with a higher expected return as supply is below the 60°C Supply 55 °C - Return 32 °C – Calculated return 41 °C Heat price (18.1*50) 905 € Fixed cost (130*2.6) 338 € Motivation (32-41)= -9 °C *2 = -18 % -> 18.1*50 €*-18% = -163 € Total bill 1080 €

GETTING THE HYDROGEN ECONOMY RIGHT

The hydrogen economy is underway, and it remains an open question in which direction it will go. Clean hydrogen can serve multiple purposes in our future society and the green transition, but heating should not be one.

By Morten Helveg Petersen, Vice-chair of the European Parliament's Committee on Industry, Research and Energy

The question is, why would we go down that road? The choices we make now define the path to a carbon-neutral economy. Investing in hydrogen infrastructure, which currently would be blue hydrogen, for domestic heating is investing in fossil fuel infrastructure, even if it is low carbon. The point of importance is that there are proven alternatives on the market, which are green from the outset, and provide consumers much more certainty that their investment will provide cheap, green ener- gy in the long run. The current push for hydrogen in domestic heating, which, amongst others, the UK government seems keen on, is wild- ly misplaced. We are amid an energy crisis, the keyword of which is energy savings. Using green hydrogen to heat build- ings via boilers would be almost six times less energy efficient than heat pumps powered by renewable energy and require a 150% increase in primary energy generation, according to a 2021 study by the London Energy Transformation Initiative. The same study concluded that blue hydrogen would result in only 58 percent of the energy in natural gas being used for heating buildings. Because of such numbers, it goes without saying that hydro- gen for domestic heating rings all the wrong bells in the cur- rent situation. For climate and consumers, investments are much better placed in proven, green technologies.

First and foremost, we need to utilize hydrogen where it makes the most sense in the carbon calculation and where electrifica- tion is not an option. In these times of energy crisis and -scar- city, we need to utilize our clean energy as effectively as possi- ble; this calls for direct electrification. But as things appear at this point, that would be areas like aviation fuel for long-haul flights, certain forms of heavy transportation, as a replacement for artificial fertilizers, perhaps as a means to decarbonize steel, and other areas where no zero-carbon alternatives exist. On the other hand, domestic heating already indulges in nu- merous alternative options, all of which offer better energy efficiency than hydrogen. Heat pumps would beat hydrogen boilers by miles in energy efficiency, even more so would dis- trict heating, a technology with the potential to cover 50 per- cent of Europe’s heating demand, according to new research. Unfortunately, the European Commission has not yet acknowl- edged the full potential of district heating. Still, district heating is potentially the most energy-efficient technology, with par- ticular synergy effects when integrating district heating with hydrogen production, utilizing the surplus heat from the Pow- er-to-X productions. On the other hand, using wind power to generate hydrogen, only to then use the hydrogen for domestic heating, represents a massive energy loss that we simply cannot afford. If we are talking about blue hydrogen, we are already off the zero-car- bon track, although the case can be made for hydrogen boilers as a transition technology.

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